IS AMAZON TAKING OVER THE WORLD?

It seems like just yesterday Jeff Bezos started a small company that sold books. Fast forward 25 years and his company’s market capitalization is larger than most brick and mortar retailers combined. He almost named the company Cadabra Inc. The name was a play on words of “abracadabra” to show how magical online shopping was. But after a lawyer misheard the name as “cadaver,” Bezos figured he should rebrand, according to Mashable. I wonder if the company would be as successful as it is today with the name Cadabra…..probably so but it’s interesting to think about.

If you examine the next infographic you will quickly see how most Amazon competitors have lost significant market share over the last decade. Sears, a former staple of American retail, shrank from $27.1B in 2006 to a meager $1.1B in 2016 a 96% decrease! Amazon increased 1,934% in that same time and the only retailer that even came close to maintaining was Wal-Mart. Although their in-store sales were down too, they were able to keep up growth by opening new stores in emerging markets. More recently they have been playing catch up with the online business and 2-day or next day delivery coupled with in store pick-up services......but is it too little too late?  This is a troubling trend for most retailers, and it doesn’t seem like it is stopping anytime soon.

I would agree they are not a monopoly, however, they are not so quietly gobbling up market share and causing some pretty sizable companies to close their doors. What does this mean long-term? Does it mean that Amazon will “control your life” one day? I can’t answer that question, but I can offer some educated guesses. Based on their current growth, market share, and the rapidly changing landscape of American commerce it appears they are well on

their way! Competition breeds many things including innovation, pricing options, and more choices to choose from. In the absence of that what are we left with? What motivation does an entity have to provide excellent service or remain competitive with their pricing if there is no one up against them holding them accountable?

"Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity. "    

--Nancy Pearcey

This article is not meant to demonize Amazon, nor do I think they are all bad. I, like many of my peers, love quick and easy one stop shopping with the click of a button. I like the speed as well as the ease and convenience that Amazon provides. The savings one can glean by doing some quick comparison and enrolling in their subscription program for products you use regularly is a nice feature which saves you time and money on staples like paper towels, toothpaste, and so on. I can buy underwear and a car there and then watch a movie all while helping take my business to the cloud. So, yes, they are far reaching. What this article is meant to do is challenge your thinking and simply encourage you to wonder “what does this mean long term?” What effects will this consolidation have over time and how will the US and frankly the world look in 3 - 5 years or 10 - 20?

Amazon just conducted a national job fair in an effort to fill over 30,000 jobs in multiple large markets across this great country. That is a big number and certainly makes the news and catches your eye. But does anyone think that number is anywhere near the amount of jobs they have replaced or that have been lost by the slow death of local small businesses? Or even the amount of mid to large sized businesses I discussed earlier? This observer would venture to guess not even close. Where does that leave us today and more importantly what does that trend do to our country long term?

“Obviously, the horrors extend far beyond our own shattered daydreams. Massive corporations squash entrepreneurial diversity and make it nearly impossible for startups and small businesses to compete”

-Money.com

As I mentioned earlier this is not meant to be a witch hunt against amazon…….it is a witch hunt against all conglomerates!! I kid………………..I kid……………

In all seriousness though let’s shift gears and look at another important aspect of our life and business here in the US. The food industry has also undergone massive consolidation over the last 3 decades. The infographic below illustrates this fact and helps us see that a mere 10 companies control almost all of the food we eat, and General Mills, Kellogg's, and Unilever own just about everything. Maybe that is why we have such a weight problem here in the US. It is more profitable for these companies to mass produce sugar based processed foods than it is to deliver healthy food and snacks to our grocery stores and schools.  But is that the right thing? I will again leave that to your discretion, but sadly it appears the old adage of “money is the root of all evil” rings truer today than ever.

So, what can you do? Shop local, visit farmer’s markets, maybe skip out on soda and highly processed foods altogether. Your body will thank you for it in the long run anyway. I hope these observations have sparked some thought and perhaps you will be more mindful when making your purchasing decisions going forward. Big business isn’t all bad and that was not meant to be my point. I simply wanted to get a dialogue going and am curious as to what my fellow LinkedIn connections think about these trends. Hopefully, this will give you some food for thought!